Management accounting field, Managerial Accounting

INTRODUCTION AND RATIONALE

The purpose of this assignment is to help students further develop a number of the skills and knowledge required and valued by the accountancy profession. The task that students are required to undertake is similar to the tasks required of a professional accountant working within the management accounting field.

Marks will be awarded based on the accuracy and completeness of answers for each section. The assignment must be attempted and completed on an individual basis and submitted by the due date.

PRESENTATION FORMAT

Students should submit a typed response. A faculty specific Assignment Cover Sheet should be completed and attached to each submission. Copies of the Assignment Cover Sheet may be found on Blackboard.

Numerical questions

In the awarding of marks for numerical questions, consideration will be given to:

correctness of answers;

appropriate formatting and headings;

relevant workings;

approach taken to solve the problem; and

completeness of answers.

The accountant for Scenic Photographic Supply Company has established the following overhead cost pools and activity drivers.

Overhead Cost Pool

Budgeted Overhead Cost

Activity Driver

Machine set-ups

$100,000

Number of setups

Material handling

$50,000

Weight of raw material

Hazardous waste control

$25,000

Weight of hazardous chemicals used

Quality control inspection

$37,500

Number of inspections

Other overhead costs

$100,000

Machine hours

Total

$312,500

Overhead Cost Pool

Budgeted Level for Activity Driver

Overhead Rate

Machine set-ups

100

$1,000 per setup

Material handling

50,000 kilos

$1 per kilo

Hazardous waste control

10,000 kilos

$2.50 per kilo

Quality control inspection

1,000

$37.50 per inspection

Other overhead costs

20,000

$5 per machine hour

An order for 1,000 boxes of film development chemicals has the following production requirements:

Machine set-ups

4 Set-ups

Raw material

l0,000 kilos

Hazardous materials

2,000 kilos

Inspections

10 inspections

Machine hours

500 machine hours

Required

A. Calculate the total overhead that should be assigned to the development chemical order.

B. What is the overhead cost per box of chemicals?

C. Suppose Scenic Photographic Supply Company was to use a single, predetermined overhead rate based on machine hours. Calculate the rate per hour.

D. Using the single plantwide overhead rate based on machine hours, what will be the total overhead assigned and the overhead cost per box of chemicals